February 2010 : Government Affairs

February 2010

Government Affairs

The 111th Congress: An Active Legislative Climate

Matthew B. Keelen and Michael J. Falencki

At the beginning of the 111th Congress, there was a massive shift toward pro-active legislating. Coming off the 2008 elections, Democrats enjoyed large majorities in the House, a filibuster-proof majority in the Senate, and control of the White House. The first policy output was a massive, nearly $800 billion stimulus plan. The House then proceeded to tackle other major policy issues, such as climate change, health care reform, and financial services regulatory reform. The Senate has legislated at a slower pace, but is poised to move health care reform, climate change, and regulatory reform.

With 2010 being an election year, a flurry of legislation is expected in the first half of the year, and then the political races will take precedence, with major legislative action minimal. We would like to take this opportunity to briefly review the major legislative action from this session and provide thoughts on 2010.

The $787 billion legislation allocated $288 billion in various tax benefits, $275 billion for contracts, grants and loans, and $224 billion for entitlements.
The legislation has provided opportunities for contracts and grants across multiple industries, with a specific focus on infrastructure.

The House passed comprehensive legislation seeking to reduce greenhouse gas emissions, lessen dependence on fossil fuels, encourage development and use of renewable energy sources, and create green jobs.

The Senate EPW Committee reported a bill out of committee (Kerry-Boxer), but action has since stalled. Kerry is working with Lindsey Graham and others to find a third-way bill that will balance the concerns of environmentalists, utilities, business, consumers and resource groups (coal, nuclear, natural gas, etc.).

After the Copenhagen summit concludes, the Senate will return to the issue in 2010. Senator Kerry spoke at Copenhagen and promised a bill in 2010. Should the Senate pass a bill, a lengthy conference is expected with the House, as emissions targets, allowances and the functioning of a cap-and-trade system could vary between the Houses.

Creation of an exchange for consumers to shop for public and private insurance plans

Inclusion of a public insurance option to compete with private insurance plans within the exchange

Non-discrimination for coverage, including pre-existing conditions

Prohibits lifetime and annual limits on benefits

Limits variable rates due to health status, gender or other factors

Proposes an essential benefit package that will serve as the basic benefit package for coverage in the exchange and will become the minimum quality standard for employer plans

Inclusion of preventive services with no cost-sharing, mental health services, oral health and vision for children, and out-of-pocket caps in the essential plan

Offers credits and subsidies to make coverage affordable

Expands Medicaid eligibility

Individual and employer mandates to obtain/provide coverage

Investment in health care workforce

Various reforms aimed at cost-savings.

The Senate passed H.R. 3590, their version of the health care reform bill. This bill differs from the House bill primarily in that it lacks a public option and pays for the bill with a tax on high-cost “Cadillac” health benefits and targeted industry fees.

With the stimulus package in process and climate change passing the House and being considered in the Senate, Congress ‚Äě with mounting pressure from the Administration ‚Äě turns its focus to comprehensive healthcare reform.

As President Obama prepared to push his unpopular health care bill through Congress, he was adamant: ObamaCare‚Äôs requirement that individuals purchase health insurance or pay a penalty was ‚Äúabsolutely not a tax increase.‚Äů